Posted tagged ‘Money Printing’

Must Reads For The Week 8/18/19

August 21, 2019

“The coordination of men’s activities through central planning or through voluntary cooperation are roads going in very different directions, the first to serfdom and poverty, the second to freedom and plenty.” – F. A. Hayek

 

THE GUN ISSUE

The Dangerous Urge To Do Something, by Judge Andrew Napolitano, at townhall.com.        Wanting the government to “do something” after a tragic situation, almost always leads to a “ready, fire, aim” government solution.

Here is an excerpt from the article:

“The government’s job is to preserve personal liberty. Does it do its job when it weakens personal liberty instead? Stated differently, how does confiscating weapons from the law-abiding conceivably reduce their access to madmen? When did madmen begin obeying gun laws?”

“The concept of a “red flag” law — which permits the confiscation of lawfully owned weapons from a person because of what the person might do — violates both the presumption of innocence and the due process requirement of proof of criminal behavior before liberty can be infringed.

The Republican proposal lowers the standard of proof to a preponderance of the evidence — “a more likely than not” standard. That was done because it is impossible to prove beyond a reasonable doubt that an event might happen. This is exactly why the might happen standard is unconstitutional and alien to our jurisprudence.

Red Flag Laws & Mass Shootings: Wrong Solution, by Thomas Massie and John Lott, nationalreview.com.       Remember the false accusations brought against Brett Kavanaugh? What about the false Trump Russia collusion accusations? When an issue becomes politicized, the rule of law goes out the window and the only rule is, win by any means necessary.

Since nothing is more politicized than your Second Amendment right to own arms in order to protect yourself against tyrannical government (not your right to hunt); Do you want the give anyone on the anti-gun left the power to take away your arms on a knowingly false accusation? A false accusation they pay no consequence for bringing?

Individuals in government are attempting to take away your Second Amendment right to keep and bear arms. As well as your Fifth Amendment rights of due process, the presumption of innocence, as well as taking property without compensation.

Does the fact that individuals in government are attempting to violate your rights, constitute tyrannical actions? Our Constitution is what protects the individual from the tyrannical actions that individuals wielding government power wish to place on us. This is the reason for the Second Amendment in the first place. Our founders understood that government will become tyrannical unless its power was constrained. And arming the people is a constraint on tyrants.

Excerpt from the article:

“While Trump emphasized mental health in last week’s speech about the Texas and Ohio shootings, red-flag laws are not specifically about mental illness. Indeed, only one state law even mentions the term. It’s about figuring out who is going to commit a crime (or suicide). This is the realm of science fiction, and is the theme of the Tom Cruise movie Minority Report. At least the Future Crime division in the movie had the help of psychics.”

“Everyone wants to stop mass public shooters. But we haven’t previously punished people on the basis of little more than a hunch, without any specific guidelines in place. Stopping “future crimes” didn’t work in the movies, and it doesn’t work in real life.

Armed Firefighter Stops Gunman At Missouri Walmart, at firefighternation.com.     Did you see this covered by the main stream media? Neither did I. A good guy with a gun stops a bad guy with a gun. When the $#!+ hits the fan, you are the first responder. Cops are second responders. The quicker a good guy with a gun can respond to an active shooter situation, fewer people will get killed or injured. Read (New FBI Data On Active Shooters Shows The Importance Of Armed Citizens, by David French at nationalreview.com.)

SCOTUS Is Considering Hearing This 2A Case…. Dem Senators Aren’t Happy, by Beth Baumann, at townhall.com.      Excerpt from the article:

“The Senators who signed alongside New York City include Sheldon Whitehouse (RI), Mazi Hirono (HI), Richard Blumenthal (CT), Dick Durbin (IL) and Kirsten Gillibrand (NY).”

“According to the group, the Supreme Court should not take up this case because the plaintiffs – gun rights advocates – are looking to “thwart gun safety legislation” and have the desire to “expand the Second Amendment.” The other argument they make: the Second Amendment and gun control is a political issue and the Supreme Court is supposed to be impartial, not a legislative body.”

“Democrats can argue that the Court shouldn’t get involved in political issues, but it’s the dumbest argument they can make. Pretty much every single case the Supreme Court hears is a political issue of some sort. There’s a question of Constitutionality that needs to be addressed. If there wasn’t, the Court wouldn’t get involved.”

“Gun control proponents, like these Senators, are backtracking because they’ve realized they put their foot in their mouth. They’ve realized this case is a big loser for them and it can actually harm their cause.”

 

ECON STUFF

The Rise Of Capitalism, by Ludwig von Mises, at mises.org.   Lets let the great von Mises explain. Here is an expert from the aricle:

“The precapitalistic system of production was restrictive. Its historical basis was military conquest. The victorious kings had given the land to their paladins. These aristocrats were lords in the literal meaning of the word, as they did not depend on the patronage of consumers buying or abstaining from buying on a market.”

“On the other hand, they themselves were the main customers of the processing industries, which, under the guild system, were organized on a corporative scheme. This scheme was opposed to innovation. It forbade deviation from the traditional methods of production. The number of people for whom there were jobs even in agriculture or in the arts and crafts was limited.”

“Under capitalism private property of the factors of production is a social function. The entrepreneurs, capitalists, and land owners are mandataries, as it were, of the consumers, and their mandate is revocable. In order to be rich, it is not sufficient to have once saved and accumulated capital. It is necessary to invest it again and again in those lines in which it best fills the wants of the consumers. The market process is a daily repeated plebiscite, and it ejects inevitably from the ranks of profitable people those who do not employ their property according to the orders given by the public. But business, the target of fanatical hatred on the part of all contemporary governments and self-styled intellectuals, acquires and preserves bigness only because it works for the masses. The plants that cater to the luxuries of the few never attain big size.”

“The shortcoming of 19th-century historians and politicians was that they failed to realize that the workers were the main consumers of the products of industry. In their view, the wage earner was a man toiling for the sole benefit of a parasitic leisure class. They labored under the delusion that the factories had impaired the lot of the manual workers. If they had paid any attention to statistics they would easily have discovered the fallaciousness of their opinion. Infant mortality dropped, the average length of life was prolonged, the population multiplied, and the average common man enjoyed amenities of which even the well-to-do of earlier ages did not dream.”

“However, this unprecedented enrichment of the masses was merely a by-product of the Industrial Revolution. Its main achievement was the transfer of economic supremacy from the owners of land to the totality of the population. The common man was no longer a drudge who had to be satisfied with the crumbs that fell from the tables of the rich.”

“There is a second important difference. In the political sphere, there is no means for an individual or a small group of individuals to disobey the will of the majority. But in the intellectual field private property makes rebellion possible.

The Triumph Of Socialism, by Lew Rockwell, at mises.org.    Excerpt from the article:

“A new BBC poll [reported November 2009] finds that only 11 percent of people questioned around the world — and 29,000 people were asked their opinions — think that free-market capitalism is a good thing. The rest believe in more government regulation.”

“That news must lift the heart of every would-be despot the world over. And it comes as something of a shock twenty years after the collapse of socialism in Russia and Eastern Europe revealed what this system had created: backward societies with citizens who lived short and miserable lives. Then there is the China case, a country rescued from bloody barbarism under communism and transformed into a modern and prosperous country by capitalism.”

“What can we learn? Far from not having learned anything, people have largely forgotten the experience and have developed a love for the ancient fairy tale that all things can be fixed through collectivism and central planning.”

“….. as Rothbard has forcefully argued, free-market capitalism serves no more than a symbolic purpose for the Republican Party and for conservatives. Economic liberty is the utopia that they keep promising to bring us, pending the higher priority of blowing up foreign peoples, jailing political dissidents, crushing the left wing on campus, and routing the Democrats.”

“Once all of this is done, they say, then they will get to the instituting of a free-market economic system. Of course, that day never arrives, and it is not supposed to. Capitalism serves the Republicans the way Communism served Stalin: a symbolic distraction to keep you hoping, voting, and coughing up money.”

“All of which leaves true capitalism — a product of the voluntary society and the sum total of all the exchanges and cooperative acts of people all over the world — with few actual intellectual defenders.”

AOC’s Top Aide Admits Green New Deal About The Economy, Not Climate, by Adam Shaw, at foxnews.com.    This is an admission of what we have known for decades. Socialist central planners have been using the environmental movement to push their collectivist ideas on the masses. They are green on the outside and red on the inside.

What Student Loans And Health Care Have In Common, by Nicholas C. Anderson, at mises.org.   When a third party pays there is no true price discovery.

Money Printing Can’t Replace Saving And Production As The Real Engine Of Economic Growth, by Frank Shostak, at mises.org.    Money printing is supposed to stimulate demand which in turn will lead to economic growth. But consumption doesn’t come before production. A specific something has to be produced before that specific something can be consumed. Production is the increase of wealth. Consumption is the destruction of wealth. Money facilitates the exchange of goods. Excerpt from the article: “money is not the means of payment but just the medium of the exchange. Payment is always done by means of goods and services.”

 

OTHER STUFF

You Should Totally Trust Our Elite Institutions …. Not, by Kurt Schlichter, at townhall.com.   Excerpt from the article:

“Basically, the best-case scenario here is that our government is unbelievably incompetent, not a particularly soothing thought. But the alternative is that it is corrupt and criminal in ways we can barely imagine. There’s an even less soothing thought. I can’t wait until these Einsteins take over my health care and are no longer restrained by the citizen veto of the guns we bitter normal people have, so far, wisely clung to.

The Road To Hell Is Paved With Virtue-Signaling, by Charles Hugh Smith, at oftwominds.com.    Excerpt from the article:

“Virtue-signaling goes hand in hand with the only “solution” that’s politically correct: throw a borrowed trillion dollars at the “problem”, dance the humba-humba around the bonfire at midnight and hope that magic will resolve the underlying issues.”

Hence the calls for Medicare for all, Universal Basic Income, and free college for all, all paid with borrowed money, despite the virtuous bleatings that “taxes on the rich/robots” will magically pay for trillions of additional dollars to be squandered on corrupt, self-serving cartels.”

Chinese Social Credit Score Prevents 2.5 Million “Discredited Entities” Buying Plane Tickets, at zerohedge.com. This could never happen here, could it?

(VIDEO) Hong Kong Protesters Sing US Anthem, With US Flags, Against Chinese Tyranny During Airport Occupation, at americanmilitaryews.com.   America is still the beacon of freedom for the rest of the world.

The Dream Team Loses To The Nobodies, by Victor Davis Hanson, at amgreatness.com.    Excerpt from the article:

“… the comical effort to destroy President Trump was a bad replay of the cultural cluelessness of a haughty Hillary Clinton in the last days of the 2016 campaign—the Ivy League prima donna, ensuring her “landslide” to come by futilely campaigning in Georgia and Arizona, fueled by the “analytics” of her whiz kids, while the orange, combed over, and uncouth Trump at her rear played the fox in her blue-wall henhouse. Was it Ivy League smarts to label roughly one-quarter of the country “deplorables” or to go to West Virginia to tell the impoverished they would have no more coal jobs?”

“There is always a civilizational elite of sorts, one based on merit, and it is often divorced from its counterfeit counterpart predicated on aristocracy, credentials, titles, and privilege. Real elites from all walks of life are rewarded for their singular achievement not for their empty reputations and media hype.”

“The last three years have been a painful relearning of that most obvious but forgotten truth that it is what we do rather than who we say we are that truly matters. That the lesson was lost on self-described egalitarians and social justice warriors is the most ironic lesson of all.

Cruz Unloads On The New York Times After Leaked Report Shows They Allegedly Planned To Push Trump-Racism Narrative, by Madison Dibble, at ijr.com.    More proof of main stream media bias. But we’ve known this for years.

Ignorant Liberals Need To Go Visit America, by Kurt Schlichter, at townhall.com.    Excerpt from the article:

“Locked up in their largely child-free urban playgrounds, our garbage elite is utterly unaware of the real America and of real Americans themselves. And it is dangerously unaware of – even actively hostile to – our true history. There are lessons there they need to learn as they continue to bully and provoke the mass of Americans who just wish to be left alone. Anyone who causally suggests confiscating millions of weapons from millions of American patriots and who has not walked through Lexington and Concord is a fool. And, sadly, our blue elite is full of fools.

UK PC Police “Draw The Line” – Ban Cream-Cheese & Car Ads Over ‘Gender Stereotypes‘, at zerohedge.com.   This could never happen here, could it?

El-Erian Admits The Era Of “De-Globalization” Is Here, at zerohedge.com.    Excerpt from the article:

“The U.S. economy is strong; however, the multinationals on Wall Street – invested overseas – are exposed. Thus there’s a disconnect and accompanying market volatility.”

“There is nothing that China and the EU can do to stop the de-globalization process: and efforts to stimulate their economy, more quantitative easing (pumping money) while the global supply chains are being shifted, are futile.”

President Trump has purposefully stalled the process of globalization, and is resetting global supply chains. This is bringing massive amounts of wealth back into the United States.”

Don’t Be Fooled, Omar and Tlaib Maliciously Set Up Israel Ban, by Katie Pavlich, at townhall.com.    These two are always in search of mischief. Especially when it comes to Israel.

Rep. Tlaib Rejects Israel’s New Offer To Visit West Bank, at zerohedge.com. She said she wanted to visit her grandmother. Israel called her bluff. She folded her cards. Israel raked in the chips.

How Important Is Today’s Racial Discrimination, by Walter E. Williams, at jewishworldreview.com.   Walter Williams dealt with real discrimination when he grew up. Read what he has to say about the subject.

 

SATIRICAL HEADLINES

Facial Recognition Software Mistook 1 in 5 California Lawmakers For Criminald, Says ACLU. So, They’re Saying It Works, Then? at daviddrakesplace.blogspot.com.

Bernie Sanders Arrives In Hong Kong To Lecture Protesters On How Good They Have It Under Communism, at babylonbee.com.

Report: King George Really Regretted Not Imposing Red Flag Laws On Deranged American Colonists, at babylonbee.com.

America Offers To Trade All Of Its Communists For Democratic Protesters In Hong Kong, at babylonbee.com.

God Demands America Remove ‘In God We Trust’ From Currency, at babylonbee.com.

Women Who Don’t Believe Israel Has Right To Exist Not Sure Why They Got Banned From Israel, at babylonbee.com.

Bill Clinton: Epstein’s Cause Of Death Depends On What Your Definition Of ‘Suicide’ Is, at babylonbee.com.

Shooter Walks Free As Police Tackle, Arrest AR-15, at babylonbee.com.

Biden Clarifies: ‘ I Like All Races, Even The Bad Ones’ , at babylonbee.com.

California Mandates Conversion Therapy For Straight Kids, at babylonbee.com.

 

CARTOONS

From theburningplatform.com.

 

Political Cartoons by Michael Ramirez

 

Political Cartoons by Chip Bok 

 

Political Cartoons by Chip Bok

 

Political Cartoons by Steve Kelley

Political Cartoons by Pat Cross

 

 

Advertisements

Some Econ Homework

June 20, 2017

Jean-Baptiste Say And The “Law Of Markets“, by Richard Ebeling, at fff.org. Say’s ‘Law Of Markets’ states: “A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value.”…..As each of us can only purchase the productions of others with his own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase.”

You can’t consume what has not been produced. Production creates the ability to consume. The more you produce the more you can consume.

Say: “It is not the abundance of money but the abundance of other products in general that facilitates sales….Money performs no more than the role of a conduit in this double exchange. When the exchanges have been completed, it will be fount that one has paid for products with products….Should a tradesman say, ‘I don not want other commodities for my woolens, I want money,’ there could be little difficulty in convincing him, that his customers cannot pay him money, without having first procured it by the sale of some other  commodities of their own….”

Counterfeiting money creates an exchange of an actual produced good for dollars that are not backed by corresponding production. This is theft. Even if the counterfeiting is done ‘legally’ by The Federal Reserve, it is still an exchange of something for nothing (aka theft).

There are always imbalances with supply and demand in the market, but they are usually corrected rather quickly. Monetary intervention by the Fed creates imbalances that last much longer and are only corrected by stopping the monetary intervention or an eventual bursting of the bubble.

Federal Reserve monetary manipulation has been going on for about a decade. Does anyone know what is real and what is fake in our economy right now? All we can say is there are major imbalances in our economy that will eventually be liquidated, and it won’t be pretty.

“Priming The Pump” Won’t Create Real Wealth, by Frank Shostak, at mises.org. When a recession happens labor and capital become idle. ‘Experts’ think the way out of the recession is to increase demand for goods and services so these idle labor and capital will become employed once again. Ignoring how the over-supply of labor and capital happened in the first place can lead to the same Government and Fed policy solutions which created the problem in the first place. Idle resources are not the problem. Idle resources are the symptom of the problem. The problem is the initial intervention into the market using the policies of below market interest rates and injecting electronically printing counterfeit money into the economy.

Excerpt from the article: “Commentators are correct in believing that what prevents the expansion of the production and the utilization of idle resources is the lack of credit. There is, however, the need to emphasize that the credit that is lacking is the productive credit – the one that is fully backed by real wealth (real savings). The fact that this type of credit is scarce is the outcome of previous episodes of expansionary monetary mischief by the central bank, which resulted in the diversion of wealth from wealth producers to non – wealth producers.”

“What most commentators advocate is the expansion of credit out of “thin air,” via central bank…. direct monetary injections or via intervention in the money markets to maintain a lower target interest rate……This expansion of unbacked credit not only cannot revitalize the economy but, on the contrary, will set in motion a further weakening of the process of wealth generation.

Fed Officials Can’t See What’s Right In Front Of Them, Jonathan Newman, at mises.org. Fed officials can’t see the forest for the trees.

Here is an excerpt from the article:”Minnesota District Bank president, Neel Kashkari recently wrote…..the Fed faces a dilemma regarding asset bubbles and whether of not they should be met with raising interest. He summarizes in five points.”

-“It is really hard to spot bubbles with any confidence before they burst.”

-“The fed has limited policy tools to stop a bubble from growing, even if we thought we spotted one.”

-“The costs of making policy mistakes can be very high, so we must proceed with caution.”

-“What we can and must do is ensure that the financial system is strong enough to withstand the inevitable bursting of a bubble.”

-“Monetary policy should be used only as a last resort to address asset prices, because the costs of the economy of such policy response are potentially so large.”

“Then he admits that it is possible artificially low-interest rates increase the probability of asset bubbles forming: “Low rates…could make bubbles more likely to form in the first place.” He laments that there is no economic theory to back this up….”

It is hard to believe that with his myriad of  ‘credentialed ignorance’ he has never heard of the Austrian Business Cycle Theory.  Excerpt from the article:

“For Mises and Hayek, the policy mistake involves any creation of credit out of thin air…….If any central bank increases the money supply through the financial system, it means that borrowers have the privilege of being the first to bid up prices as the new money ripples through the economy.”

“It means that nominal incomes, employment, consumption, the prices of capital goods, and other asset prices will increase. It means that capital will be directed into new, longer, and riskier lines of production, beyond what would have happened at the prevailing levels of real saving. These lines of production will turn out to be unprofitable as the increasing scarcity of capital becomes apparent and the costs of production become prohibitively high. Incomes, employment, consumption, and stock prices plummet as laborers and capital owners seek productive and profitable employment. The bust is made up of all of the necessary corrections for the errors made during the boom. Additional artificial credit will only delay this process and make it more painful when the day comes.

Mr. Kashkari, you said: ” Monetary policy should be used only as a last resort to address asset prices, because the cost to the economy of such policy responses are potentially so large.” Mr. Kashkari, do you know that the Fed monetary policies “of last resort” have been in effect since before 2000? These policies caused the tech and housing bubbles. What have been the costs to the economy after 20 years of these policies? They are incalculable. The only way to stop this waste is to allow interest rates to be set by the market and stop the money printing. This will bring about a recession which will correct all the dislocations of resources, capital and labor that were brought about by these policies. All thought the losses will be high, they won’t come close to the losses that will be incur the longer these monetary policies are allowed to continue.

Related ArticleInterest Rates Set By The Market vs. Interest Rates Set By The Fed, at austrianaddict.com.

Related ArticleReal Savings = True Credit. Printed Savings = False Credit, at austrianaddict.com.

Related ArticleThomas Woods Explains The Austrian Business Cycle, at austrianaddict.com.

Related ArticleThe Fed has Proved The Lefts “Trickle down Straw Man” Doesn’t Work. at austrianaddict.com.

Government: Is It Ever Big Enough? by Prager University

April 26, 2016

Will Government ever stop its intrusion into our lives?

How can the growth of Government be stopped?

Here some excerpts from the video.

“A government powerful enough to give you everything you want, will also necessarily be powerful enough to take away everything you have. Including your freedom. Government power must be limited because the alternative is unlimited Government.

(Modern day) “Liberals believe that if there is a societal problem they believe the best solution is a new Government program. If it fails to achieve its goal, which it invariably does, the solution is a bigger Government program – More – and when does more become enough? The honest answer is NEVER“.

SHACKLE  THE GOVERNMENT TO SOUND MONEY

The Constitution was supposed to control the size of government. Since “the Constitution is no threat to our current form of government,” as Joseph Sobran has said, the only way to shrink Government is to get back to sound money. As long as Government can fund itself via The Fed’s electronically printed counterfeit money, there isn’t much that can be done. Cutting the size and scope of government is the real solution to the problem, but we all know that shrinking government is almost impossible because of our political process. No matter who gets in control of congress and/or the presidency, government keeps growing.  In this article by Paul-Martin Foss titled, Sound Money And Fiscal Policy (read here at mises.org), he talks about the relationship between the growth of government and a central banks ability to print money. Here are some excerpts from the article.

“Sound money….. is the most important check on government spending. If money is sound, meaning that the government cannot inflate the money supply at will, then government spending will be limited. Remember that governments can fund their operations through three methods: 1.) Taxation; 2.) Bonds, or borrowing; 3.) Inflation.”

“Taxation is self-limiting because at higher tax rates there will be massive tax avoidance and tax revenues will fall, or the government might be voted out or overthrown if people are angry enough. Bonds have to be repaid, which comes from future taxation, so we are back to the self-limiting aspect of tax funding. Bonds also require interest payments, and if a government isn’t creditworthy then the interest payments may make borrowing money prohibitively expensive.”

“This leads us to the third and preferred method, inflation. By creating more money, the government decreases the value of each monetary unit. But it normally does so in a slow enough manner as to be barely perceptible to the average person. And where does this newly-created money go? Why, to the government’s coffers, of course. There it gets spent on wars, welfare, and other boondoggles. In the meantime, the newly-created money causes the prices of goods to increase, driving up the cost of living for the average person. In this way, inflation is a stealth tax. Its effects are just as insidious as direct taxation in that it takes money from citizens and deposits it into government coffers, but it does so in such an imperceptible way that very few people realize that they are being fleeced. That allows governments to spend far more money than they otherwise would be able to by relying on taxes and borrowing alone, which is why governments prefer it.”

Sound money and the Fed are subjects not many people had heard about, let alone understood, until Ron Paul shed light on them during his run for president. More people have to understand the concept of sound money, on the one hand, and how the Federal Reserve produces counterfeit fiat money on the other, if there is any chance of reigning in Leviathan.

 

Must Reads For The Week 10/23/15

October 24, 2015

A Challenge To The GOP From Bernie Sanders: Put Up Our Shut Up On Capitalism, by Dan Mitchell, at freedomandprosperity.org. Sanders is correct for wanting reporters to ask Republicans: ‘are you a capitalist’. Socialism is government ownership of the means of production. Sanders and Hillary don’t want socialism. They want government intervention, redistribution and crony socialism. Capitalism is private ownership of the means of production. Republicans candidates think they want capitalism. But what they propose is varying degrees of government intervention, redistribution, and crony capitalism. It’s going to take decades of elections to replace politicians who have this mindset with people who understand free markets and liberty. Inch by inch.

Sanders, Trump, and John Maynard Keynes, by Hunter Lewis, mises.org. Sanders thinks our current Keynesian crony capitalist system is capitalism. Trump thinks our current Keynesian crony capitalist system is socialism. Their cure is more government intervention in different ways. Sanders wants redistribution of wealth, and Trump wants a mercantilist attitude about trade.

Donald Trump’s Contempt For The Free Market, at economicpolicyjournal.com. Trump wants to stop Ford from building an auto plant in Mexico by putting a tariff on the goods Ford will bring in from Mexico. Government regulations and taxes incentivized Ford to move the plant. So instead of using more Government force to create different incentives, why not get rid of the regulations and taxes that produced the original incentives?

My Letter To The NY Times re: My Advice To The ECB And The Fed, by Patrick Barron, at patrickbarronblog.blogspot.com. Excerpt from the article. “If the Fed wishes to prevent financial crises, it only needs to stop initiating them. The Fed’s hubris that it can fathom the proper interest rate for our vast and complex economy must rank among the greatest fallacies of all time. The Fed sees the world through the completely discredited Keynesian lens which posits that aggregate demand–what the rest of us know simply as spending–is the path to prosperity. Anyone who believes this nonsense need ask himself why he has not liquidated his own savings on frivolous consumption…

Global Stocks Soar On Surprise China Rate Cut, by David Gaffen, at reuters.com. Is anyone shocked that global stock markets soared when China’s central bank cut interest rates and the European central bank said they will increase the size of its quantitative easing (electronically printing counterfeit money) program? How strong is the world economy when the central banks of China, Europe, and the U.S. have to lower interest rates and print money to keep it afloat?

The Cronies: Half Of All Export-Import Bank Benefits Go To 10 Companies, at economicpolicyjournal.com. The Exim Bank, backed by your tax dollars, finances transactions so foreign customers can buy from American companies. These are transactions that private banks wouldn’t make because of the commercial and political risks inherent in these deals. It’s easier to be risky when it isn’t your money. By the way, does this seem like a money laundering scheme?

A Tax I Can Support, by Per Byland, at mises.org. This just might work. Unfortunately politicians would never pass it.

Justin Trudeau Elected Canada’s Prime Minister; Young Liberal Star Compared To Obama, at mercurynews.com. How could this happen? Were Canadian citizens not aware of what has been going on South of their border over the last seven years? Oh wait! What about this article? Obama Campaign Team Hands Canada Over To Lib-Left, at canacafreepress.com.

Is The New Higher Seattle Minimum Wage Destroying Restaurant Jobs In Seattle? at economicpolicyjournal.com. The answer is yes. Because the law of supply and demand states: Less is demanded at a higher price. This includes labor.

Actors In Los Angeles File Lawsuit Against Actors’ Equity Over Wage Hike, at latimes.com. I guess a minimum wage increase is only cool when it doesn’t affect you.

Michigan Governor Signs Bills Reforming Civil Asset Forfeiture, theoaklandpress.com. Some good news for liberty.

Rhonda Rousey Shuts Down Feminist.

There’s a difference between merit and value. You don’t get payed for how hard you work. You get paid for the value you produce. Who works harder; a man with a shovel digging a ditch, or a man on a backhoe digging a ditch? It doesn’t matter. The real question is; who produces the most value?

 

Central Planners Hate Economics

August 26, 2015

F A Hayek

F.A. HAYEK The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

 

Politicians get voted into office because they promise to use the power of government to ‘do something’ to fix fake ‘crises’. They try to blame the unfettered free market for every inequality or unmet need found in society. Politicians blame economics because it is an easy target since most people don’t understand basic principles of economics.

Economic reality puts a limit on the unlimited designs of planners. The first law of economics, scarcity, especially the scarcity of knowledge, sees to it that everything has limits. Economic laws don’t limit the planners plans. Economic laws reveal the reasons the plans won’t work but they don’t create the underlying economic reality.

Ludwig von Mises

LUDWIG VON MISES  – “Economic history is a long record of Government policies that failed because they were designed with a bold disregard for the laws of economics.”

Planners have charged their central banks to do away with scarcity by using electronically printed counterfeit money. It sounds plausible on the surface if you look at ‘that which is seen’. But we all know from reading Bastiat that ‘that which is not seen’ is more important. The unintended consequences of Central Bankers policies, of money printing and zero percent interest rates, are playing out right now for all to see. Wasted resources and capital consumption are two of these results.

F. A. Hayek – “It has already been suggested that it is not necessary for the working of this system (free market capitalism) that anybody should understand it. But people are not likely to let it work if they do not understand it.

Central planners condemn free market capitalism because it doesn’t produce perfect results, (which means it doesn’t produce their desired result). Free market capitalism is the best system for allowing individuals the freedom to pursue their desires. This individual freedom has lifted the masses of people to a higher standard of living. Is it perfect? Nothing that man does is perfect. It is the responsibility of each voter to understand basic economic principles in order to protect the free market from the planners who want to destroy it. Start now because your individual freedom to pursue your interests in a free market is under siege.

 

LUDWIG VON MISES  – “Many think that governments are free to achieve all they aim at without being restrained by an inexorable regularity in the sequence of economic phenomena….they maintain that the state is God.”

These quotes by Hayek and Mises came to mind as I was reading an article titled, Economics Is Dead, And It Is Being Killed Again, by Per Bylund, at mises.org. here are some excerpts from the article.

“You have to applaud the anti-economics left for this rhetorical masterpiece. They have struggled for decades to sink the ship of economics, the generally acclaimed science that has firmly stood in the way of their anti-market and egalitarian policies, hindered the growth of big government, and raised obstacles to enact everything else that is beautiful to the anti-economics left. The financial crisis is exactly the excuse the Left has been waiting for. It is a slam dunk: government grows, Keynesianism is revived, and economics is made the culprit for all our troubles.”

“If this weren’t so serious, it would be amusing that the failure of Keynesian macro-economics (whether it is formally Keynes’s theory or post-Keynesian, new Keynesian, neo-Keynesian, monetarist, etc.) is taken as an excuse to do away with sound micro-economic theory to be replaced with Keynesian and other anti-market ideas. But it is not amusing. If most of the discussions heard are to be believed, the failures of central planning is a reason for central planning, just like socialism is a reason for socialism. The success of the market, on the other hand, is not a reason for the market.”

“…. the Left hates all that is economics. Because it points out that creating a better world through central planning, money-printing, and political manipulation is indeed impossible. The market is neither perfect nor efficient, but it is better than any available alternative. In fact, the unhampered market is the only positive-sum means available for human society. The market is indeed the only way of progress; all else is a step backward.

Related ArticleCapital Consumption aka. Eating Our Seed Corn, at austrianaddict.com.

Related ArticleWe’re All Born In The Middle Of The Story, at austrianaddict.com.

Related ArticlePolitician’s “Affordable” Ideas Must Obey Economic Forces, at austrianaddict.com.

 

Printing Money Doesn’t Equal More Savings

February 17, 2015

In this article titled, You Can’t Create More Savings By Printing More Money, Frank Shostak (mises.org) shows us that what you produce is actually what you can consume or exchange for something that you haven’t produced but want to consume. What you don’t consume or exchange is what you save. Savings is real production. Money is what we use to make the exchange process easier. Money is how we figure out exchange ratios between goods and services. Exchange ratios represented by prices in money is how 1 gallon of gas costing 2$ can be exchanged for two 1$ candy bars, or four 50 cent news papers, without ever exchanging the actual goods. Printing money isn’t the creation of any good of service. It is the creation of the demand for a good or service that is not backed by actual production. Printing money is theft.

Here are some excerpts from the article.

“Savings has nothing to do with money. For instance, if a baker produces ten loaves of bread and consumes one loaf, his savings is nine loaves of bread. In other words, the “savings” in this case is the baker’s real income (his production of bread) minus the amount of bread that the baker consumed.”

“When a baker sells his bread for money to a shoemaker, he has supplied the shoemaker with his saved, unconsumed bread. The supplied bread sustains the shoemaker and allows him to continue making shoes. Note that the money received by the baker is fully backed by his unconsumed production of bread.”

“Money can be seen as a receipt, as it were, given to producers of final goods and services that are ready for human consumption. Thus when a baker exchanges his money for apples, the baker has already paid for them with the bread produced and saved prior to this exchange. Money therefore is the baker’s claim on real savings. It is not, however, savings.”

“The printing of money therefore cannot result in more savings as suggested by mainstream economists, but rather to its redistribution”

“…. savings is not about money as such, but about final goods and services that support various individuals that are engaged in various stages of production. It is not money that funds economic activity but the flow of final consumer goods and services. The existence of money only facilitates the flow of the real stuff.”

Related ArticleWhat Comes First, Production or Consumption, at austrianaddict.com.

Related ArticleCapital Consumption, aka Eating Our Seed Corn, by austrianaddict.com.

Related ArticleDoes The Supply Of Money Have To Increase To Accommodate Increasing Production, by austrianaddict.com.